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Still No Shutdown for RIM, but Most of Damage Already Done

Last Friday the U.S. district court once again stopped short of issuing an injunction that would have shut down Research In Motion’s BlackBerry network. The handwriting seems to be very clearly on the wall, however, that RIM will be forced to settle with NTP. Judge Spencer indicated that RIM and NTP "should have settled this by now," and "there is no getting around that RIM is infringing on NTP’s patent rights."

Our belief is that even the briefest of shutdowns is extremely unlikely. There is almost no chance that RIM would ever allow this to occur. The company’s main objective is to delay a settlement for as long as possible and to reduce the eventual cost.

Regardless of the ultimate outcome, the damage has already been done to RIM’s dominance of mobile messaging. Organizations are actively evaluating alternatives to the BlackBerry platform. In a recent informal survey of messaging managers, 50% expected that their organizations would be supporting RIM infrastructure in 2007 — but only 27% expected they would still support it by 2008. These data suggest that the seeds of doubt have already been sown. The good news for RIM is that any shift is likely to face significant hurdles. Senior executives have become very attached to their "Crackberries" and any potential replacement must have clear advantages to convince them to support a switch.

David Via (editor: Richi Jennings)

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